EUR/USD advances to 2-week highs in the 1.1070 region

• EUR/USD gains extra pace around 1.1070 on Monday.
• The greenback remains on the defensive below 98.00.
• ECB’s Lagarde, advanced PMIs next of relevance in the week.

The upbeat sentiment around the single currency stays well and sound at the beginning of the week and is pushing EUR/USD to fresh 2-week highs in the 1.1060/70 band.

EUR/USD focused on trade, USD, data

The pair is up for the third consecutive session on Monday, extending the rebound from last week’s lows in the 1.0990/85 band.

The renewed and quite strong sell off in the greenback is mainly behind the rally in spot, which is now targeting the key 100-day SMA, today at 1.1093. Renewed optimism in the US-China trade front continues to sustain the positive sentiment in the risk-associated universe despite the lack of significant progress in past days.

In addition, the better mood surrounding the riskier assets continues to fuel outflows from the safe haven space, lifts yields and undermine the momentum around the buck.

Later in the week, ECB’s C.Lagarde is due to speak while the central bank is expected to release its minutes from the latest meeting. Further key data include November’s advanced PMIs in core Euroland, due on Friday.

What to look for around EUR

Spot is prolonging the rebound from last week’s lows in sub-1.10 levels, always underpinned by the renewed weakness around the greenback and hopes of a US-China trade deal. On the macro view, the outlook in Euroland remains fragile and does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the medium term at least. In this regard, all the attention will be on the publication of flash PMIs for the current month later in the week.

EUR/USD levels to watch

At the moment, the pair is gaining 0.10% at 1.1059 and faces the next up barrier at 1.1067 (high Nov.18) followed by 1.1093 (100-day SMA) and finally 1.1179 (monthly high Oct.21). On the downside, a breach of 1.0989 (monthly low Nov.14) would target 1.0925 (low Sep.3) en route to 1.0879 (2019 low Oct.1).